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Home > Statistics > 2006 Natural Gas Exports and Imports Summary

Natural Gas Exports

Natural Gas Imports

In 2006, the volume of Canadian exports of natural gas to the United States (U.S.) fell by 4.65 billion m³ (164 Bcf) from the previous year, whereas Canadian imports of gas from the U.S. fell by 1.02 billion m³ (36 Bcf).
Prices received by Canadian exporters declined from $8.89/GJ to $7.15/GJ. Canadian importers also paid lower average prices for natural gas – $7.68/GJ compared with $8.79/GJ in 2005.
Canadian exporters received $27.2 billion in revenue in 2006, a reduction of $8.4 billion from the record high of $35.6 billion in 2005. The cost to import natural gas also declined from $3.6 billion to $2.8 billion. Net revenue (exports less imports) fell by $7.6 billion from $32 billion in 2005 to $24.4 billion in 2006.

Natural gas export volumes in 2006 fell just short of the 100 billion m³ level reached last year to 99.87 billion m³ (3 526 Bcf). Export volumes in 2006 were 7.23 billion m³ (255 Bcf) below the 2002 record volume of 107.1 billion m³ (3 781 Bcf). Export volumes have exceeded 100 billion m³ each year of this decade except for 2003 and 2006, each of which was just shy of the 100 billion m³ mark.

Canada's major import points, Courtright (Vector Pipeline), Sarnia (Great Lakes Gas Transmission) and St. Clair (Michigan Consolidated Natural Gas Company) are in Southern Ontario, across the border from Detroit. Canada's gas imports are about one-tenth of Canada's gas exports. Imports into Canada grew rapidly, starting in 2001 with the advent of the Vector Pipeline. In 2006, imports into Southern Ontario declined because of a mild winter.

Last year export volumes were down on a month-over-month basis in nine months. The year 2006 was the warmest year on record in the U.S., and the month of January was the warmest ever reported. Warm weather at the end of the 2005/06 heating season and at the beginning of 06/07 heating season reduced U.S. demand for Canadian gas.
Canadian exports in 2006 only exceeded prior year exports in the summer months of June and July in response to U.S. demand from gas-fired power generators to meet unusually high cooling load demand for air conditioning. The summer of 2006, was the second warmest summer on record in the U.S.
Year-over-year import volumes were only higher this year during June (warm weather in Southern Ontario) and from September to December during the fall injection season and the early part of the winter. Mild weather conditions in Ontario during the early part of the year inhibited increased imports.

While export volumes for 2006 were only the sixth highest ever recorded, the average export price of $7.15/GJ was exceeded only by the average export price of $8.89/GJ in 2005. Gross export revenues of $27.2 billion were also the second highest ever reported, again surpassed only by the $35.6 billion received in 2005.

Prior to 2000, natural gas export revenues never exceeded $11 billion per . Since 2000, export revenues have exceeded $18 billion in each year. The last four years have been the highest revenue earning years for Canadian natural gas exports.

The year 2006 saw a decline from the high natural gas prices of 2005. Higher prices in 2005 were due to the supply disruption in the U. S. Gulf of Mexico production caused by hurricanes Katrina and Rita. The average export price was above $9.00/GJ for the last four months of 2005. In contrast, January was the only month in 2006 which saw the natural gas export price above $9.00/GJ. Thereafter, the average export price fell to about $5.00/GJ in October and then recovered somewhat to above $7.00/GJ with the onset of a very mild winter heating season in November and December.

Natural Gas Exports by U.S. Market Region

Exports declined across all U.S. market regions in 2006. Soft western U.S. market conditions for Canadian natural gas continued into 2006. In 2006, the Western U.S. had ample water supplies for hydro generation which combined with mild winter weather conditions reduced demand for Canadian gas.
Following the recovery of U.S. Gulf of Mexico production in 2006, Canadian export volumes to the U.S. Midwest and the U.S. Northeast fell as U.S. gas production recovered. A contributory factor to the decline in Canadian exports to the U.S. Northeast was lower natural gas production at Sable Island in Nova Scotia which reduced the gas available for export into New England.

Several structural market factors are currently shaping the market outlook for Canadian natural gas exports to the U.S. for 2007 Domestic natural gas demand for oil sands operations in Alberta and for gas-fired power generation in Ontario is anticipated to expand. In addition, lower drilling activity in the Western Canadian Sedimentary Basin could restrain the amount of gas available for export. A rise in U.S. unconventional gas production and growing volumes of imported liquefied natural gas into the U.S. may also reduce U.S. demand for Canadian gas exports.
The National Energy Board will continue to monitor these evolving market conditions, including more immediate market concerns such as weather, water levels for hydro generation and hurricane activity.